Archive for December, 2006

STRM – Initiation of Buy Recommendation

By: admin | Date posted: 12.31.2006 (12:00 am)

STRM – Streamline Health Solutions (Nasdaq) (Closing Price on Friday, 12/29/06 – $5.90)

Streamline Health Solutions (STRM) is another short term play. They have their biggest quarter in the fourth quarter and this year should be no different.

Streamline Health provides hospitals with solutions to improve their workflow and document management. The timing of their contracts makes the fourth quarter their best quarter for sales and profits. Last year they reported revenues of 6.2 million and had a profit of $0.30 in the fourth quarter. This year they should equal or surpass that. (more…)

MAMA – Initiation of Short Recommendation

By: admin | Date posted: 12.30.2006 (12:00 am)

MAMA – Mamma.com Inc. (Nasdaq) (Closing Price on Friday 12/29/06 – $4.89)

It is never wise to chase gains. Some people will keep buying a stock even after it has had a significant runup. They will hope the run will continue and that a greater fool will buy the stock at a higher price than them. This is the case with MAMA and now is a great time to short the stock.

MAMA is a search engine that recently announced that it is adding video search to its website. The hype surrounding this sent the stock from two dollars to over eight dollars in less than a month. Well the party is over and the stock price is crashing back down. (more…)

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Pink Sheets and OTCBB

By: admin | Date posted: 12.29.2006 (12:00 am)

I am going to write my first commentary about the most speculative stocks of all: stocks that trade on the pink sheets and on the Over The Counter Bulletin Board (OTCBB). For the most part these stocks should be avoided and if you do invest in them you should realize that you are basically just gambling.

Let’s start with pink sheet stocks. The vast majority of stocks that trade on the pink sheets are scams. I don’t even know why people are allowed to buy them. Most companies on the pink sheets don’t report financials to the SEC and some even make up their financial numbers. The most egregious companies will have no business at all. (more…)

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Will the Great “Pink Sheets Makeover” Work? (Penny Sleuth, 7/13/10)
Pink Sheets - Part I (Stock Market Prognosticator, 7/20/07)
Read more on Pink Sheets, OTC Bulletin Board at Wikinvest

PFSW – Update

By: admin | Date posted: 12.27.2006 (12:00 am)

PFSW – PFSweb (Nasdaq) (Closing Price – $1.26)

PFSW has had quite a runup since I recommended it. If you bought at $0.91 you are now sitting on a 35% gain in just over a week. It would be foolish not to take some profit. You should sell some of your shares to lock in some gains.

However, PFSW is still undervalued in my opinion and you should continue holding the majority of your shares. With today’s closing price of $1.26 PFSW still trades only eight cents above book value. I would continue holding for the time being. (more…)

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PFSW (Samurai Trader, 1/15/10)
Read more on PFSweb at Wikinvest

DTLK – Initiation of Buy Recommendation

By: admin | Date posted: 12.20.2006 (12:00 am)

DTLK – Datalink (Nasdaq) (Closing Price – $7.10)

Datalink (ticker: DTLK) is a company in a growing industry and has been reporting solid results. Datalink operates as an information storage architect which basically means it helps companies store and protect their data. This is a valuable service to offer because most businesses deal with overwhelming amounts of information that they must keep protected.

Datalink’s quarterly results can be erratic due to the timing and completion of contracts but overall their results are good. For the first nine months of this year Datalink has reported a 32 percent increase in revenues over the prior year. Datalink’s trailing earnings for the last four quarters is $0.47. That would give DTLK a PE of 15 with today’s closing price of $7.1. That is very cheap for a growing company. (more…)

PFSW – Initiation of Buy Recommendation

By: admin | Date posted: 12.17.2006 (12:00 am)

PFSW – PFSweb (Nasdaq) (Closing Price on Friday, 12/15/06 – $0.91)

PFSW (PFSweb) is a speculative play. The company has had a few challenging quarters but now is a good time to bet on a turnaround.

PFSW provides outsourcing and supply chain solutions and earlier this year PFSW merged with online retailer ecost. Before the merger PFSweb was profitable and had growing revenues. However, the combined company has had problems since the merger.

Most of these problems have been related to integrating the two companies. This integration process has taken longer than expected and fraudulent credit card activity has also had an impact on results. In PFSW’s last quarterly release though, the CEO stated that the integration was nearly complete and the fraudulent credit card activity was under control. With the integration almost done future results will be better than the last few quarters. (more…)

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PFSW (Samurai Trader, 1/15/10)
Read more on PFSweb at Wikinvest

MCZ – Buy and Accumulate at Current Price

By: admin | Date posted: 12.17.2006 (12:00 am)

MCZ – Mad Catz Interactive (American Stock Exchange) (Closing Price on Friday – 12/15/06 $0.61)

 

When you buy stocks you shouldn’t buy all at once and hope the stock doesn’t decline. You should spread out your buys and if the stock does decline your average purchase price will go down. No one is able to buy at the absolute bottom and sell at the absolute top. Furthermore, no one can consistently time short term ups and downs. If you try this you will start to chase gains and you will lose your money very quickly. (more…)

MCZ – Initiation of Buy Recommendation

By: admin | Date posted: 12.13.2006 (12:00 am)

MCZ- Mad Catz Interactive (American Stock Exchange) (Closing Price $0.65)

Mad Catz (ticker: MCZ) is a speculative play on the release of the next generation game consoles (the XBOX 360 and the Playstation 3). This company has improving fundamentals and will benefit from the hype surrounding the new game consoles.

Mad Catz sell peripherals such as controllers, racing wheels, and console accessories. Consumers will buy these products when they purchase their new consoles. The initial release of the consoles will help increase sales for MCZ but the biggest benefit should come after a year or so after the consoles have built a consumer base. (more…)

SVLF – Initiation of Buy Recommendation

By: admin | Date posted: 12.13.2006 (12:00 am)

SVL – Silverleaf Resorts (American Stock Exchange) (Closing Price – $4.20)

Silver Leaf Resorts is the epitome of an underfollowed and undervalued stock. I first came across SVL a little over a year ago by using a stock screener. It had good earnings and was trading at half its book value. The stock was a no brainer at the time but unfortunately I had no money to invest in it. Silverleaf promptly shot up from about a dollar fifty to over four dollars. I wish I had bought some then but it is still a bargain now.

SVL’s current forecast for 2006 is for net income of 0.53 to 0.56 per diluted share. If you use the lower end of their earnings guidance and today’s closing price of 4.2 you get a PE ratio of 8 (4.2/0.53 = 8). They are guiding towards earnings growth of 16% next year, which I think is conservative. If you use their earnings growth as a measure of what the PE should be (16) this values the company at $8.2. While the PE ratio is a subjective valuation measure, I believe SVL is currently undervalued. (more…)

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Michael Burry Quotes (Distressed Debt Investing, 3/30/10)
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